London Pulls Off Lows As Private Sector Perks Up

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(Alliance News) - Stocks in London remained in the red at midday, but outperformed their European peers, as a pick up in UK private sector growth helped offset underwhelming earnings.

Disappointing tech earnings in the US, were followed by lacklustre numbers from LVMH and Deutsche Bank, amongst others, prompting investors to cash in some recent gains.

The FTSE 100 index traded 13.83 points lower, or 0.2%, at 8,154.04. The FTSE 250 was down 58.02 points, 0.3%, at 21,033.47, while the AIM All-Share was down 1.34 points, 0.2%, at 788.83.

The Cboe UK 100 was down 0.1% at 814.04, the Cboe UK 250 was little changed at 18387.51, and the Cboe Small Companies was also flat at 17,244.12.

Kathleen Brooks, research director at XTB, said it is "hard to see how the rally in markets can continue for now after several weaker than expected earnings reports including Tesla, LVMH and [UPS], have led to concerns that stocks will fail to deliver the boost to earnings that would spur the next leg of the rally."

"The slip in corporate earnings from the likes of Tesla and Google, which failed to set the market alight with its AI investments, suggests that the fundamental basis for a rally is slipping away as we reach the peak summer months."

After hours in New York, Google owner Alphabet fell 3.4%, while electric carmaker Tesla slid 7.8%.

Tesla missed Wall Street profit estimates in the second quarter as it repeated guidance that vehicle growth in 2024 would be "notably lower" than 2023. Alphabet highlighted "ongoing strength" in its Search segment, as well as "momentum" in Cloud, after seeing both revenue and net income climb in the second quarter.

On Tuesday, shares in United Parcel Service, often viewed as economic bellwether for the US economy slumped 12% after it lowered guidance.